Nigeria has been a proponent of regional integration for decades, and businesses have been dealing with several checkpoints, irregular checks and high delays for decades. These obstacles have encouraged a culture of rent-seeking, where the rules are not transparent and where there are opportunities for unofficial payments. The cost is borne by manufacturers, exporters and consumers who pay more because goods spend longer than necessary at ports and border posts. Customs modernisation is not just a matter of using new technology, it’s a matter of breaking the institutionalisation of inefficiency.
Custom modernization is being driven by digital customs systems, automated risk assessment, cargo tracking, scanners and other modern systems which substitute for the human element, providing a transparent and objective method to verify a cargo’s contents. The use of electronic documentation, automated risk assessment, cargo tracking and modern scanners eliminates the human discretion by replacing manual verifications with a transparent and objective approach to verifying or validating a cargo’s contents. This makes it harder to control procedures, and easier for those that comply to move goods faster. Consistent customs procedures also help make investment more attractive as companies will be more likely to expand if they can have a clear idea of costs and delivery times. From this perspective, scanners are not just security gadgets, but instruments of economic reform.
Yet technology alone will not solve the problem. Any reform that reduces opportunities to make illegal profits is likely to be opposed by those who profit from the current situation. The fight isn’t just between scanners and smugglers, it’s between institutional change and corruption. Even the most advanced equipment can be an empty hope if there is no accountability, transparency and political commitment.
AfCFTA can boost exports in Africa by 81 per cent by 2035, and help pull approximately 30 million people out of extreme poverty, if accompanied by appropriate trade facilitation reforms. Efficient customs systems, however, are essential for ensuring that goods move rapidly and reliably across borders, to achieve those benefits. Effective institutions are the ones that will preserve markets opened by trade agreements.
This is particularly important due to Nigeria’s geographical location. The country is one of the largest economies in Africa and the most populous country in Africa, so its customs performance impacts on trade throughout West Africa. Bottlenecks in Nigeria’s borders affect regional trade and drive up logistics costs for companies trading on the African continent. This will consequently enhance Nigeria’s competitiveness and bolster her leadership in Africa’s emerging single market if its customs would be made efficient.
Smuggling is one of the greatest obstacles to this goal. The illegal trade undermines the confidence in government at the borders, weakens legitimate businesses and deprives the government of revenue. Modern scanners can help turn the tide by improving risk management by enabling customs officials concentrate their focus on suspicious cargo and by allowing legitimate cargo to pass through customs more quickly. The goal is not just to catch criminals and intercept contraband, but to ensure compliance becomes easier and more rewarding than evasion.
This is where the NCS-Afreximbank partnership comes into play. In addition to financing and technical cooperation, the collaboration backs regional transit systems, one-stop border posts and harmonised customs processes that can help cut transaction costs across Africa. The reforms reflect a broader understanding that economic integration requires institutions capable of supporting trade rather than obstructing it.
It is fair to say that critics are correct in pointing out that digitisation is not the solution to corruption. If we have poor monitoring then we may just be replacing the same issues with a new electronic system. But if Nigeria does not reform, and chooses not to do so because the process is so painful, the country will be rejecting an inefficient system that has stunted Nigeria’s economic development for decades. Modernisation of customs needs to be complemented by transparent governance, ongoing staff training, more inter-agency cooperation and political will.
The key measure of Nigeria’s free trade aspirations will be how efficient its borders are, rather than the agreements it negotiates. Each of these missed deliveries, and each of the missed checkpoints, and each of these unofficial payments is a hit on the competitiveness of the country, and a blow to AfCFTA’s promise. The scanners that are coming to Nigeria’s borders are not just signs of technological advancement, but of transparency versus opacity and productivity versus inefficiency. The successful implementation of customs modernisation in Nigeria will boost trade within the region and create new economic opportunities. If it fails, smugglers will continue to exploit institutional weaknesses, leaving Africa’s boldest trade project to falter where it matters most – at the border.